T-Bond trading comment (September 12, 2007)

We are in a trading range ! This morning we tried the upside of the zone and we failed to overpass the 114-5 area. From there on, we traced lower while stocks were going higher and several market players were cashing in on long positions. The fall was pretty straightforward with a little battle around 113-20/22 (yesterday's support area). We went all the way down to the support we designed on Monday morning at 113-8/10. After that we were getting late in the morning and liquidity died out while we kept bouncing off the support area.

Mid trend followers had another nice day after yesterday as the market gave very clear bearish signal. Talking about that, the best time of the year to do this kind of trading is in the second part of the year and 2007 is no exception to this rule. Of course for this to work, you wait for the liquidity to come back after the summer!

If the 113-10 level holds, these last two days could very well be a little breather before going higher. Otherwise, the huge bull run we started around 106-20 is coming to an end... We must not forget that the usual summer run generally dies out at the end of September/ beginning of October, when we have one.

Tomorrow, we have claims, 10y reopening and the montlhy budget statement at 2.